2023-11-02 03:38:25
Oil gained more than 1% on Thursday to end a three-day decline as risk appetite returned to financial markets following the U.S. Federal Reserve kept its benchmark interest rates unchanged.
Brent crude futures rose 89 cents, or 1.1 percent, to $85.52 a barrel by 0324 GMT, while U.S. West Texas Intermediate oil futures rose 91 cents, also 1.1%, to 81.35 dollars per barrel.
Both benchmarks settled at multi-week lows in the previous session.
Oil’s rally comes alongside gains in financial assets following the Fed kept its benchmark interest rate unchanged at 5.25%-5.50% at its latest meeting on Wednesday.
Policymakers have been scrambling to determine whether financial conditions were already tight enough to control inflation, or whether an economy that continues to outperform expectations might require even more restrictions.
“It is likely that the Fed will pause once more in December, while keeping the door open to further hikes if necessary… This might potentially stabilize the downward movements in risk seen in recent months,” said Jon Maier , chief investment officer at Global X ETFs, in a note.
Investors are also paying attention to developments in the Middle East, which are keeping them on edge over the possibility of a disruption in oil supplies in the region.
Iran’s Supreme Leader Ayatollah Ali Khamenei called on Muslim states to stop oil and food exports to Israel, demanding an end to bombing of the Gaza Strip, state media reported.
Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), produced regarding 2.5 million barrels of crude per day in 2022, according to U.S. energy data.
Market participants were awaiting the Bank of England meeting, scheduled for Thursday. In Europe, October inflation in the euro zone was at its lowest level in two years, according to a quick reading from Eurostat, reinforcing the idea that the European Central Bank is unlikely to increase its interest rate soon.
JPMorgan analysts estimated that global oil demand averaged 102.1 million barrels per day (bpd) in October, regarding 100,000 bpd lower than their previous projection for the month.
Data from the U.S. Energy Information Administration (EIA) showed the country’s crude stockpiles rose as refiners on seasonal maintenance restarted their units more slowly than expected.
However, despite the drop in refining activity, U.S. gasoline inventories increased by 0.1 million barrels during the week to 223.5 million barrels, the EIA said. (Reporting by Stephanie Kelly and Muyu Xu; Editing by Lincoln Feast)
1698899203
#Oil #Rises #U.S #Federal #Reserve #Holds #Interest #Rates #Today
